Tokenomics refers to the supply and demand policies of a token, involving its utility, distribution, flow, incentive alignment, and everything in-between.
Cryptocurrencies and tokens have transformed value transactions beyond traditional monetary exchanges, influencing social and political interactions.
Our approach to token economics is meticulously designed to support and align with all your objectives and milestones. Unlike traditional methods that rely on generic spreadsheets, we dive into token purpose, understand value flow, align incentives amongst ecosystem actors, build an economy that ensures your token accrues and retains value, and create investor-ready tokenomics that factor in the project’s financials.
Our approach has been crafted following our experience helping 80+ projects with tokenomics. We have defined a bulletproof system that facilitates bespoke solutions and economy design.
We begin by thoroughly understanding your project, its goals, actors, and token purpose. Our researchers benchmark your project against similar ventures, allowing us to gauge your potential and determine the best way to form your token economy. This data-driven approach ensures a tailored strategy that aligns with your objectives and milestones.
Next, we analyse how value flows within your ecosystem. This helps us comprehend the token's purpose and explore potential utilities. We ensure the token captures and retains value, and explore how we can integrate the token deeper within the business.
Our incentive models focus on mapping mechanisms that encourage desired user behaviours. We outline specific actions incentivised within the ecosystem and corresponding rewards. These incentives align user behaviours with project goals and foster active engagement.
To create a robust token economy, we start by mapping out all the actors, including users, developers, and investors. Next, we identify the ecosystem features such as marketplaces, nodes, and wallets. We then chart the value flows—monetary, social, political, and informational.
In designing token distribution, we allocate tokens logically across various tranches such as team, investors, community, liquidity, and treasury, based on token utility and economic needs. While industry standards serve as a reference, we tailor the distribution to fit the unique aspects of your project.
Token valuations are calculated based on allocation percentages, token price, and tranche size. We balance factors such as the Fully Diluted Market Cap (FDMC), the delta between investment rounds, raise amounts, and VC allocations to ensure a stable and realistic valuation.
For token vesting, we consider growth, liquidity, and investor delta, designing schedules that align token supply with expected demand growth. This ensures a smooth release of tokens into the market, maintaining stability and supporting long-term project goals.
We use Machinations to map out the economy and model how value flows within it. This allows us to isolate different parts of the economy and see how they impact whatever we want to measure, from price to revenues from selling tokens.
